Thursday 17 March 2011

Sue Kedgley milks it

Sue Kedgley’s maths are on a par with her economics. From an article at Stuff
Kedgley says the report failed to address the central issue of lack of competition in the domestic market.

"It doesn't tell us how the price of milk is set. Farmers say they receive less than 30 per cent of the price of milk, but it fails to shed any light on what makes up the other 60 per cent," she says.
Apart from the 100-30= 60 bit, Kedgley should realise that the price of milk in New Zealand will be the world price. For a tradable good like milk the market is the world market and the price is set by supply and demand conditions in the world market. So the correct question for Sue Kedgley to ask is, Are we paying the world price?

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